How to calculate real-time credit score in India?

The credit score of an individual is based on the potential of the borrower. Weather he/she is qualified to take loans from the bank depends on the credit history of the individual. There are different agencies of credit score who determine a user’s real-time credit score. This score may vary for every individual but the variables remain the same.

For calculating the score, in India there are 4 major credit bureaus. There areCIBIL, Experian. Equifax and CRIF High mark. The scoring model varies for every institution, but the score that comes out as result is same. Further, there are certain factors that are taken into consideration while calculating the credit score.

Check out the factors that support the real-time credit score calculation

In total, there are 4 different factors that support this calculation. These include:

1. Payment history

For calculating the score, data enrichment in India is important. The history depends on the credit cards, personal loans, bike loans, education loans, etc. While calculating, the details for late or missed payments, bankruptcies and payments made against the debts determine the credit

score. Even the histories of how frequently the payments were due or missed or the total amount due also affect the score.

2. The Utilisation ratio of Credit

While calculating the real-time credit score, this utilisation ratio is very important. In general, credit utilization refers to the total credit that is being used against the available credit. It is thus essential to always maintain a minimum of 30%-40% credit utilization ratio for improving the credit score.

3. Number of accounts

The credit mix that is included in the portfolio also impacts the credit score. Due to the data enrichment in India, several accounts are taken into consideration. These accounts then decide if the person will be eligible for credit to buy products like home loan, personal loan.

4. Age of credit

The more the real-time credit score starts to age, the better is the calculation. Even though the debt is paid, it is not wise to close the account. Instead, this can give opportunities for availing credit card accounts.

It is necessary to review the credit report at regular intervals due to the errors. In case an error is found, it should be informed to the bureau for rectification. Once done, the individual shall be able to update the credit score.